Terrace Energy Corp.
TSX VENTURE : TZR
OTCQX : TCRRF
FRANKFURT : 2TR

Terrace Energy Corp.

May 06, 2013 08:00 ET

Terrace Proposes to Issue Additional Convertible Notes

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 6, 2013) -

NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Terrace Energy Corp. (the "Company") (TSX VENTURE:TZR)(OTCQX:TCRRF)(FRANKFURT:2TR) is pleased to announce that it intends to carry out a second non-brokered private placement of convertible, unsecured promissory notes in the maximum aggregate principal amount of $15,000,000 (the "Convertible Notes").

The Convertible Notes will have the following material attributes:

Maturity Date: April 2, 2018
interest rate: 8% per annum, payable quarterly (based on the Company's fiscal year)
Conversion price: $2.00 per share

The principal amount owing under the Convertible Notes will be due and payable on the Maturity Date, unless earlier redeemed or converted pursuant to the terms of the Convertible Notes.

The Company would have the right to convert all or part of the Convertible Notes into common shares at any time after April 2, 2014 if the market price of the common shares on the TSX Venture Exchange trades at $2.80 or higher for a period of 30 consecutive trading days. In addition, the Company would have a limited right to redeem all or part of the Convertible Notes at any time after April 2, 2014 by offering cash equal to 1.08 multiplied by the principal amount that is called for redemption, subject to the terms of the Convertible Notes.

Holders of the Convertible Notes may convert all or part of the outstanding principal amount of their Convertible Notes at the conversion price at any time up to the Maturity Date, in accordance with the terms thereof. In the event of a change of control of the Company where a person acquires more than 50% of the outstanding common shares of the Company, holders of Convertible Notes will be entitled to require the Company to redeem the Convertible Notes in certain circumstances.

The Convertible Notes are non-transferable unless otherwise agreed to by the Company.

The Company may pay a finders' fee to eligible brokers in respect of a portion of the principal amount of the Convertible Notes.

Insiders of the Company may purchase up to 10% the principal amount of the Convertible Notes.

The issuance of the Convertible Notes is conditional upon, among other things, the receipt of final documentation and TSX Venture Exchange approval. There can be no assurance given that the proposed private placement of Convertible Notes will close.

The proceeds from the sale of the Convertible Notes would be used to fund current and proposed financial commitments and for general working capital purposes.

About Terrace Energy

Terrace Energy is an oil & gas development stage company that is focused on unconventional oil & gas extraction in onshore areas of the United States, particularly in Southern Texas.

ON BEHALF OF THE BOARD OF DIRECTORS

Eric Boehnke, Chief Executive Officer

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company's securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration is available. Any public offering of securities in the United States must be made by means of a prospectus that contains detailed information about the Company and its management, as well as financial statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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